Dell'Oro: Alcatel-Lucent, Cisco, Juniper edge routers to benefit from wireless backhaul growth
Wireless backhaul growth is set to become a revenue haven for edge router vendors like Alcatel-Lucent (NYSE: ALU), Cisco (Nasdaq: CSCO) and Juniper Networks (NYSE: JNPR), according to a new Dell'Oro report.
The research firm said that the demand for these routers will drive up the worldwide Service Provider Router market to nearly $9 billion by 2018.
Perhaps not surprisingly, deployment cycles in Asia Pacific, Europe and North America vary.
Alam Tamboli, business analyst at Dell'Oro Group, said that as wireless operators move forward with their LTE deployments in China and Europe, "router demand in mobile backhaul networks is taking off, with service providers expanding capacity to handle data traffic generated by LTE users."
Tamboli added that North America drove worldwide demand for routers in mobile backhaul networks between 2009 and 2013, but now that LTE coverage is nearly complete, many wireless operators have begun to level off their investment levels.
"In North America, we witnessed a rapid deployment cycle, whereas in the case of Europe, we expect the cycle to be longer due to differences in the competitive landscape and a larger population size," he said.
In the near-term, Alcatel-Lucent and Juniper reported strong gains in their edge routing portfolios in the fourth quarter of 2013.
Alcatel-Lucent reported that although its IP division revenues declined 5.2 percent year-over-year to $754 million, they did sign a number of new wireless backhaul contracts during the quarter, including one with wireless backhaul specialist PEG Bandwidth.
Driven by sales of its MX and the PTX platforms, Juniper's fourth-quarter 2013 routing and switching revenue both rose year-over-year to $603.3 million and $198.7 million from $513.7 million and $145.8 million, respectively.
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